Illustrates an example of Monte Carlo Simulation
Illustrates an example of Monte Carlo Simulation?
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We hold a complicated portfolio of investments; we would like to know the probability of losing money over the next year as our bonus depends upon our making a profit. We can calculate this probability by simulating how the individual components in our portfolio might develop over the next year. It needs us to have a model for the random behaviour of each of the assets, as well as the relationship or correlation among them, if any. Several problems which are fully deterministic can also be solved numerically by running simulations, too famously getting a value for π.
Explain the terms: diversifiable and non-diversifiable risk. Which one is more important to financial managers in business firms?
Will the cost of equity be zero if dividends paid to common stockholders will not be legal obligations of a corporation?
When is an exploitable opportunity usually seen for excess returns?
Explain the Discrete/Continuous modelling approach in Quantitative Finance.
Explain in brief the depreciation expense as it comes on the income statement. How can depreciation affect the flow of cash?
Explain the uncertain volatility.
Alpha and Beta Companies can borrow at the below given rates. &nb
What are the ways to build-up the volatility effect in an option-pricing?
State the term dispersion trading?
How does Jump-Diffusion Model Affect Option Values?
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